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2 November, 14:08

When recording Manufacturing Overhead, it is acceptable to use only one account (for both actual and applied) or to use two separate accounts. If you are using two separate accounts, when recording the application of overhead the credit should be to: Group of answer choices Manufacturing Overhead Applied Manufacturing Overhead Control Neither of these is correct.

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  1. 2 November, 14:28
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    Yes, it is acceptable to use to use two separate accounts.

    When recording the application of overhead the credit should be to: Manufacturing Overhead Control

    Explanation:

    For ease of accounting, a temporary account called manufacturing overhead control account is created. In this account, actual overhead costs are recorded on the debit side of the while overhead costs applied to Work in Process using predetermined rates are recorded on the credit side of the account.

    The data reported on the manufacturing overhead control within a period includes all indirect costs incurred during the production process they include salaries, etc.
  2. 2 November, 16:20
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    Manufacturing Overhead Applied

    Explanation:

    The Credit is an entry of the Overheads Applied in the Production Process. Overheads Applied equal the Predetermined Overhead Rate multiplied by the Actual units of production.

    The debit will be the Cash payment made on the overheads actually incurred during the Production Process.

    The Balance of this Account is an Under or Overrecovery of Overheads used to adjust the Cost of Goods Sold or Other Inventory Items.
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